# kaal:claim:2150377-003

**Claim.** The client counting safe harbor, which let an adviser count a pooled entity rather than each investor as a single client, allowed advisers to manage large amounts of securities indirectly for several hundreds of investors across multiple hedge funds while remaining outside registration and supervision.

**Type.** mechanism  **Support.** argued

**Holds when.**

- under the 1985 safe harbor as broadened in 1997
- before the Dodd-Frank Act repealed the private adviser exemption

**Source quote.**

> This safe harbor allowed investment advisers to manage large amounts of securities indirectly for several hundreds of investors in several hedge funds.53

**From.** Wulf A. Kaal, *Hedge Fund Manager Registration Under the Dodd-Frank Act* (2012), A. Attempts To Register Hedge Funds

**Cite as.** Wulf A. Kaal, Hedge Fund Manager Registration Under the Dodd-Frank Act (2012). SSRN: https://ssrn.com/abstract=2150377

**Verify.** sha256 of source PDF `0b58bb409cac7674d78515f5374096f9a349de3bbd1983c990e0edc85a635a09` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202012%20-%20Hedge%20Fund%20Manager%20Registration%20Under%20the%20Dodd-Frank%20Act.pdf

**Failure mode.** client-counting-safe-harbor-loophole  (family: regulatory-arbitrage)

**Topics.** institutional-design

**Keywords.** safe-harbor, client-definition, advisers-act, regulatory-gap, private-adviser-exemption

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